The opt out
The Conduct of Employment Agencies & Employment Businesses Regulations 2003 (the ‘regulations’) potentially apply to the services we provide to Limited Company Candidates (‘Candidates’). The regulations are intended to protect vulnerable workers from exploitation, but the government realised that the provisions of the regulations may be detrimental to some highly skilled Candidates and, subject to safeguards, allowed Candidates to ‘opt out’ of the regulations. This note is to assist you be explaining the main advantages for you of ‘opting out’ of the regulations.
Tax advantages – the regulations refer to the worker being under the ‘control’ of the client. If you wish to avoid being caught by the ‘IR35’ legislation, ‘opting out’ of the regulations may well assist your tax position by allowing numerous commercial clauses to be used in your contractual relationship with us, indicating a commercial relationship with the client, demonstrating your status as a genuine business. Some of these clauses are prohibited under the regulations – hence the advantage in ‘opting out’.
Reduced administration – the administrative requirements of the regulations are burdensome. They include a duty upon us to obtain formal, physical evidence as to your identity, experience, training, qualifications and professional authorisations. A Candidate who stays within the regulations will need to supply suitable documentary confirmations to us before we can legally provide them with work. So, remaining within the regulations may, by virtue of inevitable delays, harm your flexibility to accept assignments.
Client preference – many clients specify that they only want Candidates who have ‘opted out’ of the regulations. Clients often prefer ‘opted out’ candidates as this enables them to reduce their administration, protect themselves against expensive employment rights claims and protect their legitimate confidential business interests.
Ease of placement – due to reduced administration, Candidates who have ‘opted out’ of the regulations are easier to place in work. This is particularly important if the vacancy needs to be filled quickly.
It is of course your decision, but we strongly recommend that Candidates who wish to avoid the IR35 legislation ‘opt out’ of the regulations.
If you do not wish to opt out of the regulations we will need to treat you as being covered by the regulations and engage you upon terms that are compliant with the regulations, which will not enable you to act on an IR35 friendly basis.
Due to the reduced administration that results from ‘opting out’, and the general preference our clients have for ‘opted out’ candidates, we recommend that all Candidates ‘opt out’. It is important to note that we do not make our provision of work-finding services conditional upon an ‘opt out’ being exercised.
In order to ‘opt out’ of the regulations, a Candidate and their limited company need to give notice to us stating that they do not want the regulations to apply.
Please read the ‘opt out’ notice on your homepage – click on My Details – and click the box at the bottom of the frame to opt-out.
A notice that is given during an assignment will not take effect until that assignment has ended. An ‘opt out’ notice can be withdrawn, although if withdrawn during an assignment this only takes effect after that assignment has ended.
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Last updated 31.07.12
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